Investors started the year’s trading on a positive note with the S&P 500 gaining 0.73% in early trading as energy companies rallied on hopes of Venezuelan oil deals.
SPX 500 – Daily Chart
The price of the SPX500 has shown a strong start to the year’s trading, and another test of the all-time highs is likely. The 6,927 and 6,949 levels stand in the way for the next few weeks.
Energy companies were rallying on Monday after President Trump said a team of U.S. officials will “run” Venezuela after seizing its President Nicolas Maduro. He added that the U.S. will have “total access” to the country, including its oil reserves.
The move appears to be an effort to counter China in South America and to limit its oil consumption. China was buying Venezuelan oil, and now Trump has his sights on Iran- another exporter to the country. That brings the risk of further geopolitical tensions between the U.S. and China.
Energy producers rallied across the board, with Valero Energy posting 9% gains, Halliburton and SLB up more than +7%. Energy giant Chevron was up 4% after Trump said U.S. companies will invest “billions” in infrastructure to get the country’s oil moving again.
Venezuela’s oil industry has been in decline after years of neglect and sanctions, with some oil industry analysts believing that Venezuela could double or triple its current output of around 1.1 million barrels of oil a day, but it may take time.
“While the Trump administration has suggested large U.S. oil companies will go into Venezuela and spend billions to fix infrastructure, we believe political and other risks, along with current relatively low oil prices, could prevent this from happening anytime soon,” said Neal Dingmann of William Blair.
January is a time for institutional investors to reassess their portfolios, and the year started well for the AI sector. Optimism about AI spending boosted chipmakers and data storage companies. At the same time, this week also brings comments from the CEOs on Nvidia and AMD at the Las Vegas CES conference, which runs from January 6-9. Some clarification on the sector’s outlook for the year could further boost sentiment for AI stocks this week.
However, the longer term is more uncertain, and questions have been raised about the valuation of U.S. stocks. Analysts at Goldman Sachs recently said the last decade’s 13% will shrink to just 3% over the next 10 years.
It is unclear when the decline will begin, and there is still room for new highs in early 2026.
